This code is for the paper "Real exchange rate variability in a two-country business cycle model". The software used is Dynare++ and Matlab. It has only been tested on Windows 7/8/10. 

1.  At a command prompt run the following: <dynare++ --no-centralize model_irbc_ez.mod> 
    This requires that Dynare++ is in the same folder as these files or that the folder containing Dynare++ is in the system path. Computation time is less than one minute on a desktop with an Intel Core i7-4930K processor and 32GB RAM. 

2.  In Matlab run the file simulate_preproc.m. This places the file dynare_simul_.DLL in the matlab path and this is required before running simulate.m. You only need to do this once per Matlab session and it is not necessary if you have already run Dynare during the current session. 
    This requires that Dynare is installed and the proper folder is added to the Matlab path.

3.  Run simulate.m. This produces the numbers from the model found in table 2 in the paper and in tables 1 and 2 in the online appendix. It also produces the impulse responses in figures 2 and 3 in the paper. 
    This requires that the file dynare_simul.m is in the same folder as these files or that the folder containing dynare_simul.m is in the Matlab path. Computation time is less than 5 seconds on the desktop mentioned above. 

      
NOTE:   Random numbers are used in simulate.m. The seed that produces the results in the paper is set at the start of that file. 

NOTE:   simulate.m uses the function hpfilter.m from the Econometrics Toolbox.